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ABSTRACT
The purpose of this study was to investigate the effect of loan recovery on deposit money banks in Nigeria from 2015 to 2021. Loan recovery was proxied by capital adequacy ratio, non-performing loans, loans and advances, and total bad debts, whereas deposit money bank performance was proxied by return on assets. The study targeted a sample of thirteen (13) listed banks adopting the purposive sampling technique. Descriptive statistics and regression analysis was adopted for the study’s analysis. The study revealed that capital adequacy has a positive and significant relationship with performance of deposit money banks in Nigeria; non-performing loans and total bad debts have a negative and significant relationship with performance of deposit money banks in Nigeria; and loans and advances has a positive and insignificant relationship with performance of deposit money banks in Nigeria. Based on this findings, the following recommendations were made that: banks should bolster their capital buffers; banks must adopt more stringent credit appraisal systems and invest in early warning systems to detect and manage potential loan defaults; banks should assess the quality, not just the quantity, of their loan portfolios; and banks should employ specialized debt recovery teams, leverage technology for more effective monitoring, and engage in regular stakeholder dialogues to understand potential risks in the credit environment.
